Strategic Sourcing in the Stone Ages - What Era is Your Sourcing Organization in?
I’ve been back to the Stone Ages of Strategic Sourcing. Twice. It sounds like a fun time right? Hang out with the Flintstones, ride a couple of dinosaurs – yaba daba doo! Well, that was my first thought too, but …. yaba daba nope! You may be able to get your job done, but it’s not going to be easy. So what was it like living in the Stone Ages of Sourcing? Well, let me give you some insight…
- Missing tools: e-sourcing, spend analysis, SRM
- Savings tracking in excel
- Absence of a vendor management processes
- Inconsistency in legal support (or templates, business terms)
- Little budget for benchmarks
- Suppliers who haven’t raised their rates in 5 years. Or longer.
- Policies that are just suggestions. What’s a mandate?
- Little direct executive involvement
- Hearing “I’ve been waiting for your call” from multiple suppliers
- Business partners not understanding what your role is. Or that you even exist.
- Other business partners who will slam the door in your face. Repeatedly
- Having major potential sit right in front of you, yet completely out of your grasp
I could go on. When I originally applied for the position at Gilead, I thought to myself – this is going to be easy! Not so much. I learned that with a lack of involvement in purchasing processes and a formalized sourcing policy – you’ve entered the historic ages of spend management. Don’t get me wrong, it lends for a lot of quick wins. But trying to move the needle to more strategic activities was a struggle.
I also learned that direct and indirect sourcing may be similar, but by no means are they the same. Especially when they are trying to lead a group on category management. There are some fundamental underlying processes that are the same. But there are huge differences in the focus during those processes that change. There are also skill sets that aren’t easily learned in moving from one side to another.
So what’s the most logical thing to do? That’s right, apply for a second position to take me back even further.
My current position in some ways started out harder than the first. I went from managing agencies to the entire Marketing Category across all of Commercial. There were no tools or formalized mandated policies in place. And let’s not forget my throw me out the door – business partners.
But a lot has changed over the past three years. Now we’re not having drinks with The Jetsons. If I was ever close to that, it was when I worked at Amgen. But we sure are moving things ahead, at least to the 19th century – so to speak. Together our team has implemented tools, processes, policies and broken down a lot of doors. It’s amazing to see when you have the right people and leadership, what a big impact and change it can make in a short amount of time. And we’re excited to keep moving the needle as the company grows.
So what have I learned, if anything over the past five years living in the Stone Ages?
1. It pains me to say it, but policies, procedures, and mandates are actually VERY useful.
2. You can never have too much technology. Or budget. Ever.
3. Being part of a team of tenured sourcing staff is key
4. Don’t underestimate what it takes to implement cultural changes
5. Leadership and Executive support is essential
So what Sourcing era are you in? Have you flown into the future or you dodging Dinosaur dung? Even if you’re somewhere in between – try to have fun with it. You spend a quarter of your life at work, so enjoy what you do!